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Boral's no nonsense Kane not one to lose a fight

Brian Robins

Australians like to think of themselves as direct, no nonsense - and plain speaking. But Mike Kane, the man from the Bronx, New York, could possibly teach Australians a thing or two.

The son of a teamster, Kane gave a compelling appearance at the royal commission into trade unions on Wednesday where he gave a detailed account of alleged abuse heaped on his company, building materials maker Boral, by the Construction, Forestry, Mining and Energy Union (CFMEU) in Melbourne.

As a trained lawyer - he had been Chief Labor Counsel for US gypsum maker USG Corp for a time - secondary boycotts and the attempted flouting of the rule of law by unions and competitors alike is something he is well acquainted with. But Melbourne has been a challenge, amid allegations the CFMEU has snubbed its nose at court orders and forced contractors not to use Boral as a cement supplier.

Kane has dubbed the situation "a clear contempt ... of the legal process", with Boral caught up in a long running dispute between the union and builder Grocon.

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Typically Boral would expect to supply cement to about 40 per cent of large CBD high-rise developments. But Kane says this has been slashed to less than 10 per cent, blaming CFMEU intimidation.

Boral raised the matter with the consumer watchdog the Australian Consumer and Competition Commission in April last year, but progress has been slow.

"They continue to investigate," Kane told the royal commission this week. "This is, to me, a blatant antitrust violation and so I don't understand what the issue is as to why the ACCC cannot quickly move in this matter, but they've not.

"This is the modern day equivalent of Bleak House where 18 months later we're waiting for a hearing to determine ... whether ... there's been contempt of previous injunctions put in place," he said.

The dispute has cost Boral more than $10 million so far, a financial penalty few but the largest companies can afford.

Kane is no pin-up boy of the anti-union mob, describing himself while at USG as a "labor guy" with Boral working smoothly with trade unions around the country - except for parts of Melbourne.

Kane, 65, was parachuted in to run Boral in September 2012. He'd been in charge of its US operations for just over two years, and threw his hat in the ring to run the entire group when the opportunity arose. Since he took over, thousands of jobs have gone, the group's Asian gypsum operations have been shunted into a joint venture with USG, formerly known as US Gypsum, in part to gain access to its new generation technology for producing thin board sheets, and it has merged domestic brick production with CSR to lift declining returns.

Unlike a lot of senior managers, Kane is not one for making excuses, giving line managers the room to run their operations, while also holding them accountable.

Fresh out of university, Kane began his career with USG on the shop floor, later studying law at night as he worked his way up through the ranks. While there he got his first real break as the group struggled to lift productivity in a bid to survive.

Describing himself at the time as a child of the '60's - think rock'n'roll rather than flower power - he wasn't afraid to grasp the nettle when opportunity arose.

USG had taken on a pile of debt to shake off an unwanted corporate raider, which ultimately forced a sweeping rationalisation as the group struggled to stay afloat.

‘‘When the (first) recapitalisation came, I took advantage of the general management notion that we were going to have to do things differently if we were going to make it,’’ Kane told the Chicago Tribune newspaper in 1991.

In charge of regulatory affairs and labour relations, Kane is credited with being the prime mover behind many of the changes which got USG back on track.

He took ideas from Japanese management techniques at the time, involving employees in running plants and instituting incentive plans while eliminating time clocks and introducing peer review of hirings and also peer appraisal among the group's thousands of employees.

"I'ma labour guy," he told the Chicago Tribune. "We wanted to go down the road to some revolutionary changes in the way we ran our business. The problems made top management executives receptive to things that beforehand might have taken 10 or 15 years for them to accept."

Nearly 30 years later, Kane is using those skills honed while at USG to engineer a revival of Boral. Ironically, the two companies are now valued at just over $4 billion in the sharemarket.